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Tuesday, January 02, 2007

USA/Venezuela politics: A new strategy?


Following the re-election of Venezuela’s President Hugo Chávez in early December, the US government might finally be acknowledging the need for a reformulation of its strategy for dealing with its noisy neighbour. With that, it also has the chance to re-evaluate its approach more broadly towards the Latin American region.

On December 14th, the US ambassador to Caracas, William Brownfield, met with Venezuela’s foreign minister, Nicolás Maduro, in that country’s capital. The meeting, the first of this kind for some time, could be emblematic of a change of tack in US policy towards the Chávez administration now that the president has won another six-year term. Mr Brownfield called the discussion “a historic step that could open the opportunity for a respectful dialogue”. A less-enthusiastic Mr Maduro described it as “cordial amid tensions”. Whatever the tone of the meeting, its occurrence alone is significant.

A well-oiled relationship?

Ever since the 2002 coup that temporarily ousted Mr Chávez, no love has been lost between Caracas and the George Bush administration. Whether or not claims that Washington supported those behind the coup are true, its failure to condemn the violent removal of a democratically elected government, and its recognition of the one that momentarily replaced it, triggered a cold spell in bilateral ties, albeit one that never extended to the economic realm.

This last point is important. The disparity between the two countries’ political and trade relationships is remarkable. Venezuela and the US are so economically interlocked that it is easy to see why so much of Mr Chávez’s anti-imperialist goading is dismissed as being largely intended for domestic consumption. Despite a certain degree of trade diversification, Venezuela continues to ship the bulk of its oil—the lifeblood of the “Bolivarian Revolution”—to the US. Both sides know that US economic sanctions would impose high costs: they would be hazardous to US energy security, and fatal to Mr Chávez revolutionary project.

Starting over

The year 2007 could be one in which the US takes a fresh look at its policies towards both Mr Chávez and Latin America as a whole. Timely, it would seem, as the Democrats are about to take control in Washington and as Mr Chávez's election victory concluded a very full year-long election cycle in Latin America.

The US assistant secretary of state for western hemispheric affairs, Thomas Shannon, a career diplomat, was a telling replacement for the hawkish Roger Noriega in October 2005. It was hoped he would usher in a constructive dialogue with Caracas and a re-engagement with the region. Though there has been little departure from the old model so far, the Maduro-Brownfield meeting might signal a change in the tide. The apparent joint willingness to discuss such issues as the case of US-held Venezuelan terrorist, Luis Posada Carriles, could hold some promise for better diplomatic relations in the future.

Where we are now

The year now ending could have gone better for Mr Chávez. The failure to secure a non-permanent UN Security Council seat was a major setback in terms of extending his influence. His resounding triumph at the ballot box breathed new life into his radical agenda, however, and being granted full membership of the Southern Common Market (Mercosur), a regional trade bloc, suggested a tacit approval of his integrationist ambitions by Brazil and Argentina, the dominant Mercosur members.

How much should the US be worried by Mr Chávez? Firstly, his regional appeal is oft overstated. Among the many left-leaning governments to have emerged in Latin America, it is the socially responsible yet fiscally austere policy model that is easily more prevalent. This is not to say the Venezuelan approach does not have its fans. Voters in Bolivia, Nicaragua and Ecuador have all elected presidents sympathetic to Mr Chávez’s style of governance. There is a pattern in the case of these countries, however. They are some of the weakest in the region, in terms of the capacity and stability of their institutions, and all have recent histories of political upheavals.

The growing concern for the US administration is that Mr Chávez’s threats are becoming less hollow with time. With a strong mandate taking him to 2013, his plans to further radicalise his programme and to increase his personal power, as well as that of the state, are real. US and other foreign companies that have already had to hand over much in the way of higher royalties and equity stakes to the state are now bracing themselves as presidential pledges to socialise the economy begin to carry more weight.

Moreover, Chávez has stated he wishes to remain in charge until 2021 in order to fully implement his revolutionary project, and is aiming to amend the constitution to allow for unlimited presidential terms. He is also planning to unite the various chavista parties into a single political party.

Looking ahead

A recent report for the Council on Foreign Relations, a US think tank, suggested a new approach to rebuilding US influence in the region, involving a more persuasive style of public diplomacy, with more moderate rhetoric and greater emphasis on support for democracy and social welfare. A change in style over the past several months suggests that a new approach along these lines is already emerging, at least in part designed to contain the influence of Mr Chávez.

However, US re-engagement with the rest of the region will not be easy. The Bush administration’s assertive foreign policy in the Middle East, coupled with its hostile stance towards Venezuela and contentious immigration, security and trade policies, has led to a perception within Latin America that it will use its political, military and economic power in pursuit of its own interests. In terms of positive diplomacy, Venezuela’s government offers up cheap oil, new investment and (with the help of Cuban doctors) health assistance for the poor. This has had a higher profile than the ongoing US economic assistance and co-operation.

The Maduro-Brownfield meeting, two weeks after Mr Chávez’s re-election, might be the first step in a concerted effort to re-establish a bilateral discussion between the US and Venezuela. In the past the US’ means of dealing with Mr Chávez have been clumsy. A tendency to demonise rather than engage has proven counter-productive: Chávez thrives on open conflict with the US. Branding him a demagogue only adds fuel to the fire. It seems the US is starting to see this. In the latter half of 2006 there was a notable reduction of anti-Chávez rhetoric. Gradually, this approach may change perceptions in the region, casting Venezuela, and not the US, as the provocateur.

As noted in the Council of Foreign Relations report, “Washington wins either way from publicly seeking engagement, whether Chávez accepts or rejects the American ‘peace’ overture.” If Caracas decides not to co-operate—a strong possibility, as the political benefit Mr Chávez obtains by opposing Washington may outweigh the benefit he could gain by fully co-operating on bilateral matters—the US can begin to win back the moral high ground, something it has not had for some time.

More broadly, the US has begun to put more emphasis on its commitment to the promotion of democratic standards and on tackling the poverty and inequality from which support for Mr Chávez springs. It is notable that US support for democracy has recently stressed regional checks on possible threats to standards, including those potentially posed by Mr Chávez's attempts to consolidate his power, rather than megaphone diplomacy or threats of US action. The Mercosur group, for example, might bring its weight to bear on its newest member if it suspected Caracas of undermining democracy. Meddling in the affairs of neighbouring countries might also be a topic on which consensus could be sought, though clearly ground that the US in particular would want to tread carefully.

On social issues, there is less evidence of any shift in the US policy stance. Although US officials have acknowledged the need to address poverty and bring improvements in healthcare and the environment, the emphasis of US-assisted economic development policies—on promoting private investment and economic growth through liberalisation, stabilisation and bilateral free-trade agreements—remains unchanged.

Despite the upturn in Latin American economic growth in the past few years, poverty remains high, and inequalities in the distribution of income, wealth and access to health services continue to weigh on social welfare and political tensions. The image of the US in the hemisphere would benefit from any demonstrable contribution to progress in these areas, making it harder for Mr Chávez to rally support for his international project.

In line with the new emphasis on soft diplomacy, a renewed effort by the US to persuade Latin Americans of the benefits of free markets can be expected, with additional high-profile funding for micro-finance and targeted welfare programmes helping to demonstrate a commitment to the poor. But it is not at all certain whether this—together with more engaging diplomacy—will be enough to win back Latin America.
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